When Amazon’s Kindle Fire tablet begins shipping to end users on November 15th, it will have the potential to “radically redraw the media tablet market” according to market research and intelligence firm IDC. Unveiled on Wednesday, the Kindle Fire is a portable and flexible 7-inch tablet that will provide users easy access to a wide array of Amazon services. It is also one of the most accessible tablets to date, retailing for just $199.99 with no contract. “We have long maintained that media tablets are additive devices, not replacements for PCs, and that’s why media tablet vendors—aside from Apple—have had trouble selling units at $500 and higher,” IDC analyst Tom Mainelli said in a statement. “By pricing the Fire below $200, Amazon gives cash-strapped mainstream consumers permission to own a third device (PC, phone, and now tablet) without having to justify its cost by attempting to use it to replace their PC. At that price a tablet can just be a table [sic]: A device that’s quite good at consuming media, writing short emails, and Web browsing.” IDC’s full statement follows below.

Amazon Announces Kindle Fire
September 28, 2011
By: Tom Mainelli, IDC

Amazon today announced its new $199, 7-inch LCD-based Kindle Fire, a well-conceived product that has the potential to radically redraw the media tablet market when it ships in the fourth quarter of this year. The dual-core processor Kindle Fire is a Wi-fi only device with 8GB of storage. It runs a highly modified version of Android, and Amazon claims it will offer about 8 hours of battery life for reading and 7.5 hours for video playback. More importantly, it’s the first Amazon-branded device to offer not only access to the company’s large selection of eBooks, but also its growing collection of digital music and movies, as well as applications and games. And lest book readers worry Amazon has forgotten them, the company also today announced three new e-Ink only Kindle products. The Kindle Touch 3G ($149), the Kindle Touch WiFi ($99), and the Kindle ($79).

The new E-ink based Kindles are sure to shake up the eReader market, and we believe the new sub $100 products will help fuel that’s markets continued growth. But it’s the company’s blazing entry into the media tablet market that should have Android-based competitors, and even Microsoft with its planned future Windows 8 tablets, taking notice. That’s because the Kindle Fire both positions Amazon to be a leading digital media content seller, and dramatically resets expectations about what a media tablet can do and can cost.

We have long maintained that media tablets are additive devices, not replacements for PCs, and that’s why media tablet vendors—aside from Apple—have had trouble selling units at $500 and higher. By pricing the Fire below $200, Amazon gives cash-strapped mainstream consumers permission to own a third device (PC, phone, and now tablet) without having to justify its cost by attempting to use it to replace their PC. At that price a tablet can just be a table: A device that’s quite good at consuming media, writing short emails, and Web browsing.

And according to Amazon, the Fire will offer an especially nice Web-browsing experience, thanks to its own proprietary browser. Called Amazon Silk, it is a “split browser” technology that resides both on the device and within Amazon’s Elastic Computer Cloud (EC2). Silk combines EC2’s super-fast Internet connection with cached content from popular sites as well as logic that looks at traffic patterns to predict a person’s next page request. The end result, in theory, is a snappier browsing experience.

While the Silk browser looks promising, it’s the precedent that it sets that’s even more interesting. By offloading a portion of the work required to browse the Web from the device to the cloud, Amazon begins to decouple that experience from the tablet hardware itself. There’s no reason why Amazon couldn’t do that with other activities and services down the road. Just as interesting, you could also see the company offering these capabilities on other devices that run Amazon apps. So while the company is using the Silk browser as a way to differentiate its hardware today, in the future Amazon could very well offer customers an “Amazon experience,” fed by the cloud, on any device, and on any platform.

Beyond Silk, the most notable thing about the Kindle Fire’s software is the fact that while it’s running Android underneath, the OS is largely unrecognizable under the custom user interface Amazon has built on top of it. In this respect, Amazon has clearly taken a page from the pioneering (and successful) $250 Barnes & Noble Nook Color. Technology snobs will disparage the fact that the Fire won’t lets users visit the regular Google Android Marketplace and download standard Android apps. Regular consumers, the people Amazon is targeting with this product, won’t care. In fact, they’ll likely be delighted by the fact that the number of apps available for the Fire will be limited, and vetted, by Amazon.

The Fire is due to ship in November, and so its direct impact on the media tablet market won’t be known for some time. What is clear, however, is that by setting the price of its 7-inch product at $199, Amazon has made life very complicated for the long-list of media tablet vendors who have been trying, and mostly failing, to gain traction against Apple’s dominant iPad 2, which starts at $500. One after another we’ve watched these vendors introduced products at the same price point (or higher). And one after another, with the possible exception of Sony’s recently launched Sony Tablet S, we’ve seen the market respond with indifference. Realistically, even top-tier vendors like Sony, Samsung, and Toshiba must realize that to gain any real traction their 9- and 10-inch products must be priced closer to $300 than to $500. Meanwhile, Research in Motion continues to price its 7-inch PlayBook (by all accounts, the Kindle Fire’s hardware antecedent) at $499, a clear recipe for continued irrelevance. Neither Microsoft nor its partners have announced future pricing for Windows 8 based tablets, but chances are they didn’t expect to be competing with a $200 device. And that’s today’s price. A year from now when Windows 8 devices ship, it’s possible Amazon may well be selling the Kindle Fire 2 at an even lower price.

While the Fire’s market impact will ultimately be measured over the course of the next few quarters, two things became increasingly clear after today’s news. First: Media tablets are additive devices, not replacements for PCs, and unless you’re Apple they need to be priced accordingly. Second, going forward the media tablet hardware itself becomes less important. Obviously, you need hardware that people what to own, that’s comfortable to hold in your hand, and that offers enough local storage and compute to get the job done. But the key to the experience going forward, and where most vendors will find their profits is not in the hardware (again, with the exception of Apple). Instead, it is in delivering the software, content, and services to that device. Apple and Amazon clearly understand this. Sony and Google/Motorola seem close to grasping this important distinction, too. It’s not clear, however, that the other vendors in the market today (and those still planning to enter it) understand this reality. We believe those who fail to grasp it, or who do so but fail to act by cutting deals and putting new services in place quickly to make their devices more attractive, will find future success difficult to achieve.

It wouldn’t have to sell many to be the best selling 7″ tablet ever. I don’t disagree with you. I think it will be moderately successful. Amazon appears to be the only vendor to provide anything close, content wise, for their devices.

I hope they do well. I like Apple (I do own an iPad 2), but competition is good.

Anonymous

Yeah competition is good, hopefully it will sell enough to be considered competition tho. Android tablet markers & RIM need to be a bit more worried than Apple at this point. This has the potential to devour non-iPad tablets.

Anonymous

Moderately Successful? Lol. I guarantee the Fire will out sell the iPad2 Christmas season. Not sure why folks underestimate the Juggernaut that is Amazon.

Anonymous

We shall see if you’re right in a few months time.

http://www.TheGuruReview.net TGR

Agreed, best 7″ tablet.

http://www.facebook.com/people/Mike-Fuller/584626026 Mike Fuller

How can it redraw the tablet market when it looks EXACTLY like the playbook?

Maybe rim will get more sales because of it? :)

Anonymous

So Amazon got it wrong when its less than half the price of the Playbook and has a better ecosystem than Android?

…okay.

http://www.facebook.com/people/Mike-Fuller/584626026 Mike Fuller

It doesn’t have access to the android marketplace.. so how exactly does it have a better ecosystem? Can you access this eco sytem now?

The the size and proportions are identical to the playbook including the bezel etc. Not sure how you don’t think its identical.. If apple can win a suit/injunction against samsung even though they don’t really look the same this should be a no brainer.

This may be a killer tablet down the road, but at the moment its going to have 85$ subscription fee to use the amazon cloud services. The lack of android market place may turn off people.

And its not android.. its a heavily modified version of android. What the rammifactions are in regards of porting other android apps, we don’t know yet.

Anonymous

You’re highly misinformed.

– There is no mandatory subscription fee on the Kindle Fire to access cloud services.
– Amazon App Store is essentially the Android Marketplace with Amazon pricing.
– Consumers are buying it (and it will sell millions) because it’s a 1) Kindle, and 2) Pricing

Easy

Mike, I don’t think you have your facts right here. Sure Amazon have done what they can to lock users into Amazon services and ecosystem. But a) I don’t believe they charge for that b) it’s pretty much just like Android market, and c) a big one….. A heck of a lot of people like Amazon and its ecosystem and will see this as a bonus no a restriction.

http://twitter.com/starnovsky Stan Tarnovsky

They all look the same (flat and rectangular). Like all laptops look the same. Look doesn’t mean anything, it’s what inside matters.

Smart. All I have to say. Nothing new on the Cloud internet browsing integration, but on properly pricing it’s device, it will be a best seller in no time.

http://twitter.com/matthewfsnider Matthew Snider

I agree with Michael below, it will sell great BUT will not make anyone who owns or is considering an iPad waiver whatsoever.

Anonymous

Funny. I own an Ipad and just pre-ordered this.

Anonymous

Once the tablet will be available around the world, we could say that… right now, it just changes the US Market…

http://www.allegrotechie.blogspot.com Allegrotechie

Ummm did we all know that? For 199 cats will be buying this!

http://www.droiddoes.com/ Norm

I will not be. It needs to be pure stock DROID OS

Anonymous

Even though you’re trolling, I agree. Ill wait til cyanogen tackles it

somedude0123

It will do well in the low end market.

Anonymous

How is this better than my Samsung Galaxy Tab T849 that I flashed with Gingerbread and rooted; subsequently, installing Crackle and Skype with Video Chat (via Front Camera)? Next on list is GTalk with Video Chat. Oh, I forgot (stupid me), mine has two cameras, MicroSD functionality (up to 32GB), GSM 3G SIM card slot (soon to be unlocked for Global travel), and Google Android!

Highlandchef

How is is better? Better is relative and for you it’s not, but Samsung would go broke selling only to customers interested (or able) to do what you did. The other 99.9% of potential buyers will look at the price and buy the Fire.

Anonymous

Consumers don’t really care about the Galaxy Tab and all the other Android tablets. If you haven’t noticed, Android tablets have been selling poorly and have failed to gain any significant traction.

It’s an iPad market. Pure and simple. Android tablets come across as “me too” devices. People want an iPad. Not a Xoom, Galaxy Tab, Thrive, or whatever other generic Android tablet comes out weekly with some bizzarro name and marketing strategy that nobody pays attention to.

The Kindle Fire will be a hit because it’s NOT trying to be an iPad clone or “me too” Android device. It’s just being itself, a Kindle with color touchscreen. It has instant name recognition and credibility. Everyone knows what a Kindle is already.

Galaxy Tab? Xoom? Thrive? Nobody cares!

Anonymous

Galaxy tab is one of the best selling tablets. And don’t use the “well ipad is killing them”. That’s like saying OSX should die because windows destroys them in market share

http://www.facebook.com/superg05 Jeremy Washington

maybe so but they could not keep asus and acer on the shelf its all about pricing

Dameek

I agree with your assessment, jjortiz1286, of the Kindle Fire. I have ordered one and I have no interest in owning an IPad. I will be using the Kindle Fire to read books on as I currently do with my Kindle 3rd generation ereader. For those who love IPad’s,keep buying them, as I have no angst against Apple fans.

Anonymous

Hell of a lot cheaper, that’s how

Simple

uhhm……. very impressive dude, but I think you might find you are what’s known in the trade as a niche market !! ;-)

JR

Thank you Amazon! It doesn’t matter if you like the Amazon Fire or not,
Amazon just set the price for entry for a rather good spec’ed tablet!
Now we will start to see tablet prices come down out of the
stratosphere and level off to a more realistic price point. Again thank
you Amazon!!!!

Anonymous

Agreed. I think tablets are cool but I’d never pay more than 300 for a mobile OS, if that. A windows 8 tablet sure, because it can run desktop apps. But the ipad, galaxy tab, zoom….none of it is worth more than 300 to me

Anonymous

If you were advising me to get a tablet, what would you say to convince me that it’s useful to my life? All I can think of is a bigger screen to play Tower Raiders, and maybe surf while I’m watching TV. Thanks

Anonymous

Its a fad. They’re for media consumption. Like an mp3 player, only instead of consuming music you consume internets. Something else will cone out in 5 years and people will not care about them anymore.

http://twitter.com/AeroHil Jon L

is this a new concept?
“…customers don’t want to pay an arm and a leg for stuff…”

somedumbCanuck

This article is missing a giant caveat: In America Only. Unless if the USA now counts for the whole world.

Justin Lisenby

Didn’t you know? America is all that matters. We will let y’all in other countries get it later. Go USA!

Anonymous

7 inch is too small to do anything, except maybe read a book. I would rather watch my stuff on a 50 inch plasma.

Norm Sucks

So assboy likes a 10.5 incher? No wonder you think 7 inches is to small. Take a night and it will tighten up.

Anonymous

Not if the power button is as horrible as the one on the playbook. They’re made by the same company, right?

Anonymous

We’re still talking about the god damn power button?

http://www.tabletaholic.com Tablet Deals

love the form factor

Anonymous

Will the KF replace my iPad 2? Certainly not! However, the KF will be my device of choice to use at work, in airports, and in other places where I previously used my larger, expensive, iPad 2. Again, bravo Amazon.

Norm Sucks

The fire is shittier than Norm’s cock after he pulls it out of GooFans asshole.

Anonymous

Their going to sell a ton of these this holiday season; the price point guarantees it. It’s beginning to look a lot like Christmas hahahaha.

Anonymous

But only in the USA and Canada.

It wil fail outside USA, because of the lag in release time and the competition by the time it launches.

http://profiles.google.com/dalekstrauss Dale Strauss

Am I the only one, or are you just a little bit creeped out by Amazon Silk? I know every service is a stalker in one form or fashion (Googel, Facebook, etc.) but this one is parsing my every movement, not just searches. Makes you wonder if they chose the name “Silk” for the light and strong persistent connection to the Internet, or the subliminal message of a spider’s web?

Anonymous

…..I can’t believe….My best friend’s mom makes 87 USD an hour on the computer. She has been out of job for 10 months but last month her check was 6398 USD just working on the computer for a few hours. Read about it here…http://MoreMoney

AnnDroid

If I didn’t already own a tablet, this would be the one I’d get. Although, it would be hard to give up the great keyboard dock on my Asus Transformer.